Taking Full Advantage of Energy Abundance

NEW YORK ( TheStreet) -- Let's talk about the big economic story of 2013, energy independence.

U.S. oil production is now over seven million barrels a day, Bloomberg reports, up 1.13 million barrels/day from just last year.

The "spread" in price between West Texas oil and Brent is now over $23/barrel, notes MarketWatch, the reason being the cost of transporting oil from where it's produced -- often in North Dakota -- to where it's consumed by refineries.

The good news is Bakken oil is now starting to reach East Coast markets, which should show up at gas pumps this summer. The better news is that thanks, in part, to the natural gas glut that preceded today's oil boom, the U.S. is actually throwing less carbon into the atmosphere than before.

Even better news is the continuing price spread and the gas glut combine to give U.S. manufacturers a huge price advantage over their Chinese competitors, partly offsetting labor cost differences. (Automation may help make up the rest.)

But the best news is yet to come. The U.S. trade deficit is going down, Bloomberg reports , as some of that excess oil is exported.

Wait, there's more. Vehicle miles traveled are leveling off due to higher prices, and gasoline consumption has resumed its downward slope from the Great Recession, thanks to higher-mileage cars. Only 7% of current savings come from better mileage, the Oil Drum writes , but that will rise as more high-mileage cars are sold. Detroit is rising on a wave of energy efficiency.

But all this ignores the real elephant in the room. I know, you're going to say climate change. I'm talking about the other elephant, renewable energy.

Countries that don't enjoy our oil abundance, like Australia, are now finding that wind energy actually costs less to produce than electricity from either natural gas or coal, as Alternet reports. Germans are fully supportive of that country's move to renewable energy, CleanTechnica adds , so oil export markets are becoming more competitive.

But here's the biggest news of all.

The key biomass technology pursued by KiOR (KIOR) in Mississippi, called Biomass Fluid Catalytic Cracking, or BFCC, could soon produce usable refinery inputs for less than the marginal cost of production for fracked oil, BiofuelsDigest writes.

It's this "compression spread" that has scientists at Texas A&M predicting East Texas will soon become "the Saudi Arabia for biofuels crop production," as reported in the Liberty County Vindicator . The process for turning biomass of all kinds into usable refinery feedstocks is coming into view.